Report highlights

High-grade graphite can be further processed by intercalation and thermal shock to produce expanded graphite, and materials such as graphite foil, based on expanded graphite, form the fastest growing end-use sector for graphite. This sector is characterised by low-volume, high-value applications including gaskets and seals, heat sinks and bipolar plates for fuel cells and flow batteries

Refractories remain the most important end use, accounting for around 33% of total global demand for natural graphite. The main driver for growth in demand for graphite-containing refractories has been increasing steel production in Asia, particularly China. Future growth in this sector is unlikely to track recovering steel output as unit consumption of refractory material per tonne of steel is falling in both China and the CIS as new steel mills are installed.

The use of natural graphite in batteries has increased partly as a result of increased availability of high-purity, high-carbon grades and partly because of increased output of lithium-ion batteries, which use graphite in the anode.

China is by far the largest producer and consumer of natural graphite. In 2008, it accounted for around 80% of supply, although the rate at which mine production has grown has slowed to 1.6%py since 2001. In contrast, output in Brazil, Sri Lanka and North Korea has increased at higher rates ranging from 3.5%py to over 6%py. Increasing demand for flake graphite has led to a number of potential developments outside China that could add a total of 70,000tpy to global supply.

Chinese production is still characterised by a large number of small companies but larger producers are emerging in both Heilongjiang and Hunan. Increasing regulation of mine safety and plant emissions, together with the imposition of export taxes and permits is likely to lead to further consolidation.